The management of Clean Corporation is concerned about the growing demand on the
ID: 2482822 • Letter: T
Question
The management of Clean Corporation is concerned about the growing demand on the part of investors and the public in general for environmental disclosures in annual reports. In reviewing a number of foreign competitors’ annual reports you observe a number of environmental disclosures including; actual and contingent liabilities for the cost of environmental clean-up, corporate programs and policies to protect the environment, and self-assessment reports of internal goals reached with respect to its environmental protection measures. You also notices that some companies include environmental disclosures in their annual reports while others prepare a separate report. The management of Clean is agonizing over the extent and type of environmental disclosures to provide in the company’s next annual report. They have hired a consultant to work along with you to help them establish environmental reporting policies. a. In your opinion are environmental disclosures in company annual reports necessary? Explain. b. What specific environmental disclosures should companies provide? Why?
Explanation / Answer
a) Yes, to ensure eistence in a competitve market, company must ensure enviornmental disclosures in its annual report. Other companies have been taking very extensive efforts in this context and present compnay is lagging behind in this context .
b) Suggested enviornmental diclosures will include
1) Enviornmental programmes and policies -this will inform what programmes and policies company is following to maintain enviornment
2) Preventive measures adopted- this will inform what preventive measures a company is adopting to protect degradation of enviornment
3) Compliance with enviornmental regulation - this will ensure company is following regulations required under law
4) Any certification received in respect of enviornmental protection
5) Investment in capital asset to protect and maintain enviornment
6) Training to employees - this will ensure company has been taking adequate step in educating its employees in this context
7) Companies future expected investments - this will inform what company is planning in future with respect to enviornmental protection
8) Initiative, awareness campaign - This will inform companies ability to educate general public to promote and maintain enviornment
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